Wednesday, 8 February 2017

Responding to the Fixed Costs Consultation - in the real world!

One
subject that is going to exercise lawyers seeking justice for victims in 2017 is
Fixed Recoverable Costs or FRC to its friends. The process has already begun in
earnest.

Last
week saw the publication of the Consultation Paper from the Department of
Health on the extension of FRC to clinical Negligence cases claims up to £25k
(Why is the DOH deciding how much they should pay in legal costs to victims of
its own negligence?)

Under
the proposed scheme costs payable in a case that settles pre issue will be a
maximum of £4k and issued cases that settle post listing will result in maximum
costs of £9k. The biggest surprise is that cap on experts fees at £1200 for all
reports on breach of duty, causation, condition and prognosis. The good news is
that the scheme will not extend to all cases up to £250k – at the moment. The
NHSLA is thought to prefer an extension to cases up to £100k. On the basis of
the options set out in the consultation, firms that act for victims will face
significant challenges.

The
date for responses is 1stMay
2017 and work needs to begin now. In addition, Jackson LJ is working on a
report on FRC generally. He began his fact finding road trip in Leeds yesterday
and will report by the end of July. He is known to favour an extension to all
civil cases up to £250k.

So
here are some thoughts on possible responses now that the dust has settled a
little.

I
think we have to be realistic and accept that we are going to see the extension
of FRC to Clinical Negligence and other types of litigation.

Jackson
has nailed his colours to the mast. Indeed his terms of reference are – to
develop proposals forextendingthe present civil fixed recoverable
costs regime in England and Wales so as to make the costs of going to court
more certain, transparent and proportionate for litigants and to consider
the types and areas of litigation in which such costs should beextended, and the value of
claims to which such a regime should apply.

Note that his brief assumes that there will be an
extension of FRC.

Fixed costs themselves are not necessarily a bad
thing. In fact they can produce good returns for those who work quickly and
efficiently. They also introduce a level of certainty and reduce the likelihood
of expensive costs litigation. Commentators including Kerry Underwood
have been saying this for years –

Like it or not I think we must accept the inevitable.
This is why I don’t think that a response to the Clinical Negligence Proposal
should oppose the idea altogether. That will a bit like hiding in a tent to
escape an avalanche.

But we should still respond robustly, particularly in
relation to the payment options. Table 3 in the Consultation (Page 16) is
flawed. This summarises claimant’s legal costs as a % of damages from 2013/14 –
2015/16. Those cases will include many – possibly a majority that pre-date
LASPO but have concluded after 2013. So the figures are skewed by those cases
where the NHS paid out success fees and fully recoverable ATE Premiums. If an
analysis is limited to cases begun post LASPO then the comparison is bound to
be less stark. So the first thing we need to do is come up with a realistic
assessment of costs as a percentage of damages once those additional
liabilities are stripped out. Those who do a lot of Clinical Negligence work
should also look at their own cases and suggest realistic alternatives based on
their experience.

Kerry Underwood has done a similar exercise in
relation to FRC generally –

His calculations come up with significantly higher
figures than the DOH. A measured, carefully calculated response is more likely
to be effective than a simple rejection of the idea altogether.

We all face months of uncertainty. Could the Clinical
Negligence Consultation be torpedoed by Jackson in July? But that does not mean
we can sit back. There needs to be a carefully co-ordinated response focussing
on realistic payment for the work required to secure justice for victims.